Tuesday, October 03, 2006

FT on Tymoshenko

"Edward Chow, an energy consultant who worked with Chevron on Caspian and Chinese projects, and who has done extensive analyses of Russian and Ukrainian energy policy, says that while big western energy companies could develop the Black Sea, their participation has certain disadvantages from the point of view of some Ukrainian politicians.

"If major western companies get involved in Ukraine, they will have to open up the black box of their policies, and all sorts of cockroaches will come out. Who gets access to local customers? Who gets what prices for your production? Who gets access to pipelines and how do they get it? Who gets to export?"

Yulia Tymoshenko, the former prime minister of Ukraine, and now leader of the opposition, could benefit from internal opposition to the energy dealings. According to Mr Chow: "There is no one other than Tymoshenko to lead on the transparency issue. She is speaking on behalf of good government, of asking why Ukraine needs middlemen and shadowy deals."

"Her attitude," says the Ukrainian oil operator, "is that Ukraine should have half of any production from a deal with western companies. That is perfectly acceptable, and what the industry is accustomed to working with in the rest of the world. At least she wanted to bring in western investment to the energy industry, and believe me, they can't do it themselves...

..The issue for energy minister Boyko is not what gets done but who does it. If it's going to be done by people he doesn't control, he doesn't want to do it at all."

There is good news here for one group: Gazprom investors. At this rate, the Russian gas company will be able to hold on to a nation of customers for decades longer."